04 December 2009

• National Bank of Canada (NA) fourth quarter operating earnings increased 3% YOY to $1.40 per share, below expectations. Operating earnings were lower than expected due to negative sequential swing of $0.18 per share from securitization, lower security gains of $0.04 per share, and other charges of $0.12 per share as well as higher-than-expected salaries & benefits (including variable compensation). Underlying earnings were relatively strong. Operating ROE was 16.9%.

Implications

• Financial Markets earnings doubled to $140 million from a year earlier but declined from the record $167 million in the previous quarter. Trading revenue was extremely strong at $197 million versus $168 million in the previous quarter.